Florida Judge Orders State to Clarify Uber Insurance Requirements

Florida taxi companies may finally get the answer they are looking for from the Florida Department of Highway Safety and Motor Vehicles (FDHSMV) regarding minimum insurance requirements for transportation network companies (TNCs) operating in the state.

In a Sept. 17 order, Judge George S. Reynolds III of the Second Judicial Circuit Court for Leon County said the state agency must respond to a complaint filed by two Florida taxi companies on September 9.

The original lawsuit was initiated by B&L Services Inc., Capital Transportation Inc., and individual Jeremy Lynch, as a means to finally get FDHSMV to respond to requests from the Florida taxi industry over whether for-hire passenger transportation vehicles used by Uber, Lyft and other TNCs comply with minimum insurance required by Florida statutes.

The FDHSMV has 40 days from the date of the order to respond or Judge Reynolds will issue a decision on the matter.

“We filed [the complaint] because there needs to be clarification relative to what is required for insurance on for-hire vehicles,” said John Camillo, president of B&L Service, Inc. in Fort Lauderdale, Fla. “These are questions the DMV has not responded to that have been posed to it by the industry and governmental agencies.”

Camillo said the Florida taxi industry has made numerous requests from the FDHSMV on how for-hire companies like Uber and Lyft can operate in the state without being insured with a commercial auto policy at all times – not just while they are in use. All of the requests from the taxi industry and lawmakers have so far been ignored, Camillo said.

He said the City of Tallahassee recently sent a question and also didn’t get an answer.

“We want an answer and they have refused to give an answer,” Camillo said.

According the original lawsuit filed by the taxi companies, Florida Statutes 324.031 ensures that a for-hire passenger transportation vehicle is “insured at all times with the requisite commercial coverage.”

The lawsuit claims the law is “clear and unambiguous” in mandating that a for-hire passenger transportation vehicle be insured at all times and it does not contemplate that a vehicle may only be an insured for-hire passenger transportation vehicle sometimes, but not at all times.

Additionally, the taxi forms maintain that the law does not contemplate an operator of a for-hire passenger transportation vehicle is an insured owner or operator only when transporting customers and connected via the Uber app to Uber’s platform and technology.

The complaint says that the current Uber driver insurance policy from James River Insurance doesn’t insure either the Uber driver or the vehicle when the driver is not connected to the Uber application. Thus, the James River Policy acts to insure only Uber-related activities, which Florida law does not permit, according to the complaint.

The taxi companies also complain that James River Insurance, which is a surplus lines carrier, is not a member of the Florida Insurance Guaranty Association as required by the statute.

Camillo said insurance is the biggest expense for a for-hire company and it would “clearly be more advantageous” for all for-hire companies to have limits that comply with a private passenger auto policy and only have the higher limit when they are transporting a passenger. He said that is the backdrop they are faced with in Florida on the Uber issue.

“Our position is we are out there buying insurance that complies with the law that is very costly and a competitor in our market is buying insurance that doesn’t comply with the law, which gives them a competitive advantage,” Camillo said. “If the DMV says [TNCs] don’t need this we will go to the insurance market and ask them reevaluate our policies so we can have lower limits.”

Camillo says TNCs in the state of Florida have also lobbied the state legislature for two years in a row to create a hybrid insurance model where the operators of their vehicles have higher limits when engaged and lower personal lines policy when they are otherwise engaged. He says they have gone so far as to try to change the law in the last two legislative sessions to remove TNC operators in the definition of for-hire vehicle.

“We think they have tried to do that because they are well aware there is no exception in the current law for a TNC driver, so if they become a TNC driver they must have higher limits on admitted paper,” he said.

“This is a Florida-specific issue – insurance is regulated at the state level so the laws and insurance that apply to Florida are only in Florida,” he said. “As someone who has been involved in the industry, it’s hard because there are varying laws around the country. But I do believe providing TNC insurance where you have higher and lower limits depending on activity will result in a significant amount of litigation the industry wouldn’t have otherwise had.”

“This is a bellwether question for our industry,” he said. “This is something that will play itself out before the next Florida legislation session and may give guidance to the legislature on how to solve the problem.”

Uber did not respond to a request for comment from Insurance Journal on the pending Florida complaint.